Medicaid exempt assets: What Federal and State Laws grant

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PostPosted: Thu Jun 03, 2010 6:46 pm   Post subject: ASSETS  

WHILE ON MEDICADE, THE HOUSE BECOMES THE PROPERTY OF THE STATE OF MISSOURI. WHAT HAPPENS TO THE CONTENTS IN THE HOUSE? CAN HEIRS REMOVE ITEMS, OR CAN THEY BE SOLD BY HEIRS?


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PostPosted: Thu Jun 03, 2010 6:51 pm   Post subject:   

CAN CONTENTS OF HOUSE BE REMOVED/SOLD BY HEIRS???


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PostPosted: Thu Jun 03, 2010 7:15 pm   Post subject:   

Quote:
WHILE ON MEDICADE, THE HOUSE BECOMES THE PROPERTY OF THE STATE




Never heard of this before. A lien on the property perhaps, but I doubt the state has a right to take possession of one's home while living. Something unconstitutional lurking in there. But, then again, I'm not from Missouri, so you'd have to show me, too.

Quote:


CAN HEIRS REMOVE ITEMS, OR CAN THEY BE SOLD BY HEIRS?




Does this mean that a once-living Medicaid beneficiary has died, and the property is being claimed under the Asset Recovery laws? If for some reason the state has in fact taken possession of the property (meaning land and structures), it is unlikely that personal property would be confiscated. But the "asset recovery" laws do not go far in describing exempt assets, so if the real estate property is not valuable enough to satisfy the state's claim, it could then turn to other non-excluded assets, which could mean certain things of value inside the home.



For further explanation, you would want to look at the list of "excudable assets" under the Medicaid spend down test. Things like personal jewelry, one car, business assets . . .


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PostPosted: Mon Jun 14, 2010 7:33 pm   Post subject: Is term life insurance considered an asset  

My Mom recently passed away after a brief illness. She had Medicaid and Medicare. I just received a letter from State of NJ for a claim and lein against the assets of my Mom.

I have to fill out a 5 questionaire letter, should her Term Life insurance be added in her assets along with bank account balance?


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PostPosted: Wed Jun 16, 2010 4:44 am   Post subject:   

Life insurance proceeds are not subject to asset recovery if payable to a named beneficiary, but become part of the estate cash assets if there was no named beneficiary. The claim against her estate for Medicaid payments by the state of New Jersey is limited to the value of benefits received after age 55.



If there are sufficient cash assets in the estate, the state has a legitimate claim to them. If there are insufficient cash assets, the state can also claim hard assets such as a home or auto -- but not in excess of the actual benefits received. Personal assets such as jewelry are exempt from asset recovery.



Anyone can offer to pay the state the amount of the lien in lieu of the state seizure of estate assets. Family members (or others) could combine their personal resources to pay the state's claim and later file a claim for reimbursement with the administrator of her estate during probate. This would allow for a more orderly liquidation of estate assets and probably provide a better benefit to the estate.



Be sure to carefully review and evaluate the state's claim. An authorized representative of the estate can obtain access to medical billing records if they cannot be located among your mother's effects. You may also be able to negotiate a settlement with the state for less than the lien amount, but you will not be able to escape the lien entirely, because it is mandated under federal Medicaid rules.



There is no claim/lien against the estate for Medicare payments.



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PostPosted: Fri Jun 25, 2010 2:12 am   Post subject: Medicaid Eligibility (Spend Down)  

My father (aged 87) has been in a rehabilitation facility for a few months and was originally classified as requiring "skilled care" which meant he was covered by Medicare and his private supplemental insurance. As of a couple of weeks ago, he is no longer considred requiring "skilled care" and therefore is not covered by Medicare and his supplemental insurance. Since he suffers from dementia, seizures and kidney problems, he is unable to care for himself and my mother (aged 83) is unable to care for him at home. He has been denied by Medicaid because of a life insurance policy that has a face amount of $12,000 and a cash surrender value of $6,700. We have been told that if he takes the cash value of the policy he can only spend-down $3,500 for burial which would leave him still above the $2,000 countable resource limit for Medicaid. The cost for him to remain at the facility is $6,000 a month, which we can not pay. What can we possibly do to get him eligible for Medicaid?


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PostPosted: Fri Jun 25, 2010 3:37 pm   Post subject:   

Unfortunately, life insurance cash value IS countable as a spendable asset under Medicaid rules. To qualify for Medicaid, one must meet the spenddown test, and the confined person must have assets no more than about $2000, as you indicate.



The only choice is to meet the spenddown test. You do not have to surrender the life policy, but must use the cash value to pay for the needs of your father.



So, take have him take the $6700 as a policy loan, pay his nursing home cost for the one month, leaving him with $700 in assets (assuming there is nothing else in his "countable" assets). Voila! Qualification for Medicaid is probably met, there will still be $5300, less accruing interest in life insurance proceeds at death.



Understand that all Medicaid payments will become a lien against his estate. If life insurance proceeds, however meager, are payable to the estate, although the mortuary would have a claim for burial expenses, the state's claim could interfere.



JUST MAKE SURE THERE IS A NAMED BENEFICIARY!! That way the money will not be available to the state and could be used to pay some of the funeral expense without hindrance.



The complicating matter is your father's dementia. It could be difficult to maintain that he understood what he was doing when signing a policy loan request. If he is the owner of the policy (most likely), and he cannot sign the request due to legal incapacity, this could be a huge problem regarding both Medicaid and beneficiary.



A court order as conservator allows that person to administer the affairs of an incapacitated person, but the contract of insurance is inviolable. The court order cannot change the relationship between owner and insurer. A conservator is unlikely to be able to persuade the insurer to alter the contract (new beneficiary) or allow a loan.



For all who read this post, this is a testimony to the power of independence available through LONG TERM CARE INSURANCE which would have avoided all of this turmoil.



With all due respect to MRH and his/her father, who are innocent pawns in the grand scheme of things, THE MORAL OF THE STORY: If you believe the Government has a plan to take care of you in your old age -- Social Security, Medicare, Medicaid, or Obamacare -- you may already be suffering from dementia.



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PostPosted: Tue Jul 27, 2010 5:22 pm   Post subject: medicaid and life insurance  

I am getting conflicting answers.Life ins. must not exceed $1500 face value or $1500 in death benefits. MR


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PostPosted: Tue Jul 27, 2010 8:07 pm   Post subject:   

It really doesn't matter what the face value (or death benefit) of the life insurance is, because that money is only available to the insured's beneficiary after the insured dies. Cash value is something else.



If there is CASH VALUE in a life policy, Medicaid (Medi-Cal in California), can force the cash to be borrowed and "spent down" so that the total assets of the Medicaid recipient fall at or below the required limit of $2000. So, to that extent, the Medicaid rules generally require that the cash value in excess of $1500 is a "countable asset" which would be added to all other countable resources of the recipient and spouse that are subject to the spend down test. The policy could have a face amount of $1,000,000, but if the cash value is below $1500, it's not a countable asset.



If the liquidation of other assets, prior to removing the life insurance cash value, gets the remainder below the threshold, the life insurance may not have to be touched at all. Mostly depends on the actual amount of CV in the policy. It it's low, not a problem. If it's substantial, it could be a stumbling block. If it's more than $2,000, it will have to be spent down to at least that point.



And you cannot use policy assignment to another party as a way to avoid the spend down test, unless the policy ownership was transferred at least 60 months ago, if the transfer occurred after February 8, 2006.



Transfers of any assets within the 60 month look back period for the purpose of avoiding the spend down test subject the recipient to a penalty. There are only limited transfer privileges that escape both the look back and the penalty.



The maximum assets that a community spouse may have is one half of the couple's total assets but not more than $109,560 in 2010. The actual rules for Medicaid spend down vary by state, so to try to give more definitive information could be misleading.



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PostPosted: Fri Jul 30, 2010 6:55 pm   Post subject: Recovery excemptions  

I was recently told that since my Mother has 2 disabled children, Medicaid would not ever proceed with recovery of her equity in home or other assets as well. Is that correct? Is this a new rule?



So can she have assets in her name that exceed the normal thresholds due to these disabled children.



One was a dependent, disabled child that lived with her all her life. He now lives with one of her other children, as she is in a nursing home.


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PostPosted: Fri Jul 30, 2010 8:52 pm   Post subject:   

Quote:
since my Mother has 2 disabled children, Medicaid would not ever proceed with recovery of her equity in home or other assets as well. Is that correct? Is this a new rule?




This is neither a rule, nor new. The estate of any person age 55 or older receiving LTC benefits courtesy of Medicaid will be subject to asset recovery following their death. The home is "protected" for a surviving spouse or disabled child, but only as long as he/she resides in the home -- but the rule only applies if the individual has "an equity interest" (i.e., is a joint owner with right of survivorship [aka: joint tenants, tenants in common]). Upon the sale of the property, the lien is recoverable, regardless.



Quote:
He now lives with one of her other children, as she is in a nursing home.




This may be problem, since the disabled child does not reside in the home. To exempt the home as a countable asset from the spenddown test, state rules apply. There are two possibilities.



Quote:
In some states, the home will not be considered a countable asset for Medicaid eligibility purposes as long as the nursing home resident intends to return home; in other states, the nursing home resident must prove a likelihood of returning home




If your mother will not be capable of returning home, or has no intent to do so should she no longer need the nursing facility, it will not be exempt, unless her spouse or dependent child still resides there. Apparently that is no longer the case. In such cases, only $500,000 (can be raised by the state to $750,000) of the equity is protected from the spenddown requirement.



One possibility exists: to avoid the recovery of her home by the state, or forced spenddown of excess equity, the home may be placed in a trust for the benefit of the disabled child(ren). That transfer is exempt from the Medicaid look back rules.



Quote:
So can she have assets in her name that exceed the normal thresholds due to these disabled children.




No. That is not a criteria of the spenddown test. To qualify for Medicaid, she must meet the spenddown requirement, period, subject to the rules pertaining to countable and exempt assets.



===



This is a lesson in estate planning and the need for long-term care insurance.


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PostPosted: Wed Sep 08, 2010 10:37 pm   Post subject: whole life ins nursing home MISSOURI SOCIAL SERVICES  

Mom in a nursing home, they found she has a whole life ins with a cash surrender value of $2741. now they want us to call MISSOURI SOCIAL SERVICES. what can I do ?


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PostPosted: Tue Sep 21, 2010 5:36 pm   Post subject: assest spend down  

My mom is in the nursng home with alzheimers. I (her only son) have to spend down about 4,500.00 on items that will benefit her so she can continue to be qualified for Medicaid. Can you give me examples of what qualifies as items that will benefit her?


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PostPosted: Wed Sep 22, 2010 12:23 am   Post subject:   

Nursing home board and care, physical and occupational therapy, direct medical expenses, transportation expenses, and prescription medications are just a few of the qualifying expenses. What you cannot spend money on is stuff like vacations, gambling, gifts to others, etc.



The spenddown test is a monthly thing. So if mom has continuing retirement income, it must be used each month except for a $35 allowance for personal expenses. The purpose is to force "share of cost" expenditures so that the government is not footing the entire bill unnecessarily.



Understand, however, that every dollar the government spends courtesy of Medicaid is a dollar of asset recovery the government forces the state to go after following mom's death. Mom's home and other assets in her name at death can be seized to repay the debt owed, unless dad or a disabled child still resides there. The lien endures without interest until the asset may be seized.



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PostPosted: Fri Oct 15, 2010 3:23 pm   Post subject:   

is a spouse's IRA consistered and asset for a medicaid applicant


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